Brookline Bancorp Announces Second Quarter Results

Published 4:05 PM ET Wed, 19 July 2017
Globe Newswire

BOSTON, July 19, 2017 (GLOBE NEWSWIRE) -- Brookline Bancorp, Inc. (NASDAQ:BRKL) (the “Company”) today announced net income of $14.9 million, or $0.20 per basic and diluted share, for the second quarter of 2017, compared to $13.4 million, or $0.19 per basic and diluted share, for the first quarter of 2017, and $12.7 million, or $0.18 per basic and diluted share, for the second quarter of 2016.

“We are pleased to report record quarterly earnings of $14.9 million or $0.20 per share for the second quarter of 2017,” said Paul Perrault, President and Chief Executive Officer of the Company. “During the quarter, we generated steady growth in loans and deposits with a stable net interest margin. We look forward to continued success in the second half of 2017.”

BALANCE SHEET

Total assets at June 30, 2017 increased $160.3 million to $6.66 billion from $6.50 billion at March 31, 2017, and increased $361.6 million from $6.30 billion at June 30, 2016. At June 30, 2017, total loans and leases were $5.54 billion, representing an increase of $75.6 million from March 31, 2017, and an increase of $278.4 million from June 30, 2016. During the second quarter of 2017, total loans and leases increased 5.5 percent on an annualized basis.

Investment securities at June 30, 2017 increased $20.8 million to $649.9 million, comprising 9.8 percent of total assets, as compared to $629.1 million, or 9.7 percent of total assets, at March 31, 2017, and increased approximately $47.4 million from $602.6 million, or 9.6 percent of total assets, at June 30, 2016.

Total deposits at June 30, 2017 increased $57.5 million to $4.71 billion from $4.65 billion at March 31, 2017 and increased $224.3 million from $4.49 billion at June 30, 2016. Core deposits, which consists of demand checking, NOW, savings, and money market accounts, increased $28.6 million from March 31, 2017 and increased $255.7 million from June 30, 2016.

Total borrowings at June 30, 2017 increased $9.9 million to $1.07 billion from $1.06 billion at March 31, 2017 and increased $38.2 million from $1.03 billion at June 30, 2016.

On May 2, 2017 we issued 5,951,250 shares of common stock with net proceeds to the Company of approximately $82 million.

The ratio of stockholders’ equity to total assets was 11.95 percent at June 30, 2017, as compared to 10.83 percent at March 31, 2017, and 10.95 percent at June 30, 2016, respectively. The ratio of tangible stockholders’ equity to tangible assets was 9.99 percent at June 30, 2017, as compared to 8.79 percent at March 31, 2017, and 8.82 percent at June 30, 2016. Tangible book value per share increased $0.59 from $7.93 at March 31, 2017 to $8.52 at June 30, 2017.

NET INTEREST INCOME

Net interest income increased $2.5 million to $55.6 million during the second quarter of 2017 from the quarter ended March 31, 2017. The net interest margin increased 6 basis points to 3.59 percent for the three months ended June 30, 2017.

NON-INTEREST INCOME

Non-interest income for the quarter ended June 30, 2017 decreased $11.4 million to $4.5 million from $15.9 million for the quarter ended March 31, 2017, primarily due to the recognition of the gain of $11.4 million on the NRS investment in the prior quarter.

PROVISION FOR CREDIT LOSSES

The Company recorded a provision for credit losses of $0.9 million for the quarter ended June 30, 2017, compared to $13.4 million for the quarter ended March 31, 2017. The decrease in the provision for the quarter was primarily driven by a decrease of $12.3 million in specific and taxi medallion related reserves.

Net charge-offs for the second quarter of 2017 were $2.4 million compared to $1.0 million in the first quarter of 2017. The ratio of net charge-offs to average loans and leases on an annualized basis increased to 17 basis points for the second quarter of 2017 from 7 basis points for the first quarter of 2017. The increase in net charge offs was due primarily to two commercial relationships.

The allowance for loan and lease losses represented 1.17 percent of total loans and leases at June 30, 2017, compared to 1.21 percent at March 31, 2017, and 1.09 percent at June 30, 2016. The allowance for loan and lease losses related to originated loans and leases represented 1.20 percent of originated loans and leases at June 30, 2017, compared to 1.25 percent at March 31, 2017, and 1.13 percent at June 30, 2016. The decrease to the allowance for loan and lease losses coverage ratio was primarily driven by the charge off of the specific reserve on two commercial relationships during the second quarter of 2017.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended June 30, 2017 increased $1.0 million to $34.8 million from $33.8 million for the quarter ended March 31, 2017. The increase was primarily driven by an increase of $1.1 million in compensation and employee benefits, an increase of $0.1 million in equipment and data processing, offset by a decrease of $0.3 million in other non-interest expense. The efficiency ratio for the second quarter was 57.93% compared to 48.92% for the first quarter of 2017 and 57.97% for the second quarter of 2016. The efficiency ratio for the first quarter of 2017 was lower due to the gain on the NRS investment in that quarter.

PROVISION FOR INCOME TAXES

The effective tax rate was 35.9 percent for the three months and six months ended June 30, 2017.

RETURNS ON AVERAGE ASSETS AND AVERAGE EQUITY

The return on average assets of 0.91 percent increased during the second quarter of 2017 from 0.83 percent at March 31, 2017. The return on average tangible assets increased to 0.93 percent for the second quarter of 2017 from 0.85 percent for the first quarter of 2017.

The return on average stockholders' equity increased during the second quarter of 2017 to 7.76 percent from 7.58 percent for the first quarter of 2017. The return on average tangible stockholders’ equity increased to 9.58 percent for the second quarter of 2017 from 9.55 percent for the first quarter of 2017.

ASSET QUALITY

The ratio of nonperforming loans and leases to total loans and leases was 0.76 percent at June 30, 2017 as compared to 0.83 percent at March 31, 2017. Nonperforming loans and leases decreased $2.8 million to $42.3 million at June 30, 2017 from $45.1 million at March 31, 2017. Nonperforming assets at June 30, 2017 decreased $0.2 million to $47.1 million, or 0.71 percent of total assets, from $47.3 million, or 0.73 percent of total assets, at March 31, 2017.

DIVIDEND DECLARED

The Company’s Board of Directors approved a dividend of $0.09 per share for the quarter ended June 30, 2017. The dividend will be paid on August 25, 2017 to stockholders of record on August 11, 2017.

CONFERENCE CALL

The Company will conduct a conference call/webcast at 1:30 PM Eastern Daylight Time on Thursday, July 20, 2017 to discuss the results for the quarter, business highlights and outlook. The call can be accessed by dialing 877-504-4120 (United States) or 412-902-6650 (internationally). A recorded playback of the call will be available for one week following the call at 877-344-7529 (United States) or 412-317-0088 (internationally). The passcode for the playback is 10110050. The call will be available live and in a recorded version on the Company’s website under “Investor Relations” at www.brooklinebancorp.com.

ABOUT BROOKLINE BANCORP, INC.

Brookline Bancorp, Inc., a bank holding company with $6.7 billion in assets and branch locations in Massachusetts and Rhode Island, is headquartered in Boston, Massachusetts and operates as the holding company for Brookline Bank, Bank Rhode Island, and First Ipswich Bank (the "banks"). The Company provides commercial and retail banking services, cash management and investment services to customers throughout Central New England. More information about Brookline Bancorp, Inc. and its banks can be found at the following websites: www.brooklinebank.com, www.bankri.com, and www.firstipswich.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. The Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among others, the risks outlined in the Company’s Annual Report on Form 10-K, as updated by its Quarterly Reports on Form 10-Q and other filings submitted to the Securities and Exchange Commission ("SEC"). The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

BASIS OF PRESENTATION

The Company's consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) as set forth by the Financial Accounting Standards Board in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws. Certain amounts previously reported have been reclassified to conform to the current period's presentation.

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures, such as the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases, tangible book value per common share, tangible stockholders’ equity to tangible assets, return on average tangible assets and return on average tangible stockholders' equity. These non-GAAP financial measures provide information for investors to effectively analyze financial trends of ongoing business activities, and to enhance comparability with peers across the financial services sector. A detailed reconciliation table of the Company's GAAP to the non-GAAP measures is attached.